India Nepal

Recently political instability in Nepal has attracted renewed attention towards implications for India’s bilateral and regional interests.

Socio- cultural ties

share a cultural history around the development of – Hinduism and Buddhism.
Education: around 3000 scholarships/seats annually to Nepalese nationals for various courses at the Ph.D/Masters, Bachelors and plus–two levels in India and in Nepal.
Culture: many facets from religion, language, cuisine, movies etc. Nepal, with its unique geography, history and cultural heritage, still is an integral part of the broader cultural history and tradition of Indian sub-continent
‘Roti-Beti ka Rishta’

open borders and unhindered movement across it.
helps the citizens of both countries in both livelihoods as well as to have strong people to people contact and close bonds through marriages and familial ties.

Treaty of Peace and Friendship of 1950

establishing close strategic relationship signed at Kathmandu.
allows free movement of people and goods between the two nations and a close relationship and collaboration on matters of defence and foreign policy.
reciprocal treatment of Indian and Nepali citizens, establishes national treatment for both Indian and Nepalese businesses, and gives Nepal access to weaponry from India.
enabled Nepal to overcome the disadvantages of being a land-locked country.

Economic Ties

Trade and businesses

India is Nepal’s largest trade partner as well as the largest source of foreign investments. Total bilateral trade in 2018-19 reached US$ 8.27 bn.
India provides transit for almost the entire third-country trade of Nepal. Nepal uses Kolkata port for its sea trade.
Indian companies economic activities in Nepal pmanufacturing, power, tourism and service sector.
Water resource Cooperation: A three-tier bilateral mechanism was established in 2008 to discuss issues relating to cooperation in water resources, flood management, inundation and hydropower between the two countries.
Energy Cooperation: a Power Exchange Agreement since 1971 for meeting the power requirements in the border areas of the two countries, taking advantage of each other's transmission infrastructure.

Development Aid and Assistance

financial and technical aid to Nepal’s developmental activities.
grass-root infrastructure, health and education, water resources and rural development.

Connectivity

India being the gateway of Nepal to the world with open borders and connectivity initiatives enhancing people-to-people contact and economic growth and development.
Linking Sagarmatha and Sagar – developing inland waterways to enhance the movement of Cargo and provide access to the sea.
Developing railway connectivity – to link Kathmandu and Raxaul (Bihar).
India has sister city agreements with Nepal

Defence Ties

India trains and equips the Nepalese Army and assist in its development in modern lines.
1950 friendship treaty, Nepal can buy arms from India.
joint military exercise known as Surya Kiran.
The Gorkha Regiments of the Indian Army are raised partly by recruitment from hill districts of Nepal.
Defence cooperation: India assisting Nepal Army in modernization, providing assistance during disasters etc. Also about 32,000 Nepalese Gorkhas are serving in the Indian Army.

Disaster Management

India provides assistance both in terms of personnel aid, technical aid and humanitarian assistance in such instances.

Multilateral Ties

share several multilateral forums such as BBIN (Bangladesh, Bhutan, India, and Nepal), BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) NAM, and SAARC (South Asian Association for Regional Cooperation) etc.

Reasons behind Nepal’s growing proximity with China

Dependency on India- geographical constraints,India’s imposition of non-tariff barriers and lack of standard infrastructure
Negative perception about India- treaty-based unequal treatment, the open border, India’s delay in implementation of various projects in Nepal more so vis-a-vis China E.g. Mahakali agreement has remained without start. Indian reluctance in responding to border-encroachment complaints, inundation complaints etc.
Potential benefits from China- Chinese railway as an opportunity to bring Chinese pilgrims and tourists to Lumbini, the birthplace of the Buddha, and to the popular valley of Pokhara, help enhance Nepal’s overall economic capacity.
Ideological basis- The communist parties in Nepal have favoured and consistently protested against India.

Issues

Boundary disputes: Nepal issued a new political map that included disputed areas including the Limpiyadhura, Lipulekh and Kalapani (Parts of Uttarakhand). Issues in settling border disputes-

China factor: political map seen to be influence of China due to the two Communist governments and emerging close relations
China opening port facilities to Nepal and providing access to Trans Himalayan Railway reduces Nepal’s dependency on India and reduces the leverage that India has with the Nepal
varying Interpretation of the boundary
Big Brotherly attitude: created a sense of insecurity in the Nepalese government and its citizens and any settlement would be seen as a weakness
Nepal internal politics: also pose problems as political parties flip from pro-India positions to anti-India positions

Changing nature of traditional business ties: easier for Nepalese businesses to trade with China as rules have made it harder to do business with India.
Ideological basis- communist parties in Nepal have favored China and consistently protested against India.
China factor: China opening port facilities to Nepal and providing access to Trans Himalayan Railway reduces Nepal’s dependency on India. Nepal has joined China’s Belt and Road Initiative.
India’s alleged role in Nepal’s internal politics: India’s implicit support for the 2015 blockade on the landlocked country, anti-Indian sentiments have been running high.

Measures needed to strengthen relations

Amendments to the Peace and Friendship Treaty of 1950: Nepal wants amend certain clauses in the 1950 Treaty
Addressing Infrastructure need of Nepal: mega Indian projects like Pancheshwar multi-purpose project and asked for investment in sectors like hydropower, agriculture, tourism, infrastructure and IT.
Strengthening Economic cooperation: new approach that allows ordinary Nepalis to access opportunities India’s economic growth offers.
Nepal needs to assuage India’s concerns about Chinese activities in Nepal. India needs to minimize interference by acknowledging Nepal’s strategic, political and economic compulsions. Nepal should also keep an eye on illegal activities like human trafficking, black money dealings and terrorist intrusions which constitute a major security concern for the Indian establishment
Revival of South Asian Association for Regional Cooperation (SAARC): institutional and multisectoral cooperation under SAARC rooted in South Asian identity cannot be replaced.

Possible implications for India

Erosion of buffer state- In the case of an India–China war
Effect on other neighbours- including Bhutan, which also has faced similar circumstances with both India and China.
Impact on regional groupings-hurdle in regional groupings like BIMSTEC (Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation) in which Nepal holds a significant voice.

Class Notes 4 You